By Kieran Rooney and Mike Foley
Proposed new laws will pave the way for a massive gas storage project in waters off Ninety Mile Beach at a cost of $500 million, as the Allan government seeks to soften its public stance on gas amid looming supply shortages.
The move came as the government said it would still consider forcing households to replace gas heaters and hot water systems with electric alternatives when they reach their end of life, but ruled out similar rules for cooktops.
The Golden Beach gas storage facility is expected to come into its own as the big Bass Strait fields decline.
On Monday, Premier Jacinta Allan and Energy Minister Lily D’Ambrosio announced legislation would be introduced to smooth the path for the development of offshore gas storage projects in Victoria, including in empty gas reservoirs under the sea.
If the laws are passed, the Golden Beach Energy Storage Project off the coast of Gippsland is the most likely candidate to move ahead first, with plans to harvest more than 30 petajoules of gas from the area in 2027 before using the site for storage from 2028. This first phase would have a capacity of about 19 petajoules.
The project, using empty reservoirs on the ocean floor as a massive storage facility that could supply the east coast market in peak periods, has already undergone an environment effects statement and is moving towards a final investment decision.
Origin Energy has signed a contract securing the Golden Beach gas and 40 per cent of its storage capacity.
The Australian Energy Market Operator has warned of gas supply shortfalls on peak days as early as 2026, with annual shortages looming from 2028 – the time when the Gippsland facility could be made available.
Victorian Premier Jacinta Allan will not ban gas cooktops. Credit: Simon Schluter
The chief executive of project developer GB Energy, Tim Baldwin, welcomed the laws and said gas storage would play a key role in the energy transition, securing supply for peak periods in winter and shoring up supply as more renewables came online.
“This is an important milestone for the Golden Beach project, which will provide much-needed initial gas supply and subsequent storage infrastructure for the east coast energy market,” he said.
“Developing new gas storage in south-east Australia is becoming of growing importance, providing flexibility to manage energy supply and demand as Gippsland Basin output declines, coal-fired generators exit the market, and more renewables enter the market.”
The laws also reflect a shift in gas policy and rhetoric from the Victorian government since Allan became premier.
D’Ambrosio has been critical of gas use, particularly in households, but over the past 12 months the government has adjusted its public statements to stress the fuel has a role to play in the energy transition. Victoria is expecting its 95 per cent renewable energy target for 2035 will be supported by 5 per cent gas to provide stability to the network.
The state government is planning laws that will allow gas to be stored off Ninety Mile Beach to prevent looming shortages. Credit: Simon Schluter
“Our new legislation paves the way for the development of offshore gas storage projects, to help secure gas supply while we get on and build cheaper and more reliable renewable energy for the future,” D’Ambrosio said.
The government is likely to need the support of the Coalition to pass the legislation, with Victorian Greens leader Ellen Sandell accusing Labor of contributing to climate change by encouraging more offshore gas.
“We don’t need any new gas – Australia already exports far more than we’d ever need,” she said. “It’s expensive and destroys the climate.”
Opposition energy spokesman David Davis said the government should have introduced laws encouraging gas supply sooner to avoid shortfalls, accusing D’Ambrosio of “waging a war on gas” over the past decade.
“Ten years of botched energy policy is the reason that there’s a [gas supply] challenge,” he said.
On Monday, Allan also moved to quell political attacks on her government over household gas use, announcing cooktops would not be included in a regulatory impact statement examining whether homes should be required to replace gas appliances with electric alternatives when they reach the end of their life.
Other gas appliances, including heaters and hot water systems, will still be considered.
The Australian Pipelines and Gas Association said bans on these products would make the state’s plans to use gas in its energy mix unworkable by threatening the viability of the distribution network.
“It threatens consumer choice, the future of the state’s gas networks and, by extension, the 60,000 businesses connected to it that are driving the state economy,” chief executive Steve Davies said.
But Dan Cass, executive director of Rewiring Australia, said government intervention was needed to ban all gas appliances.
“It makes no economic sense for households to keep one gas appliance because they have to pay the daily connection charge as if the whole house is using gas,” he said. “Our advice is simple: if your last appliance is a gas stove, replace it today.”
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